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Issues: (i) Whether the order directing liquidation of the corporate debtor called for interference, particularly in view of the attempted settlement and the plea to keep liquidation in abeyance under section 12A of the Insolvency and Bankruptcy Code, 2016. (ii) Whether dismissal of the application seeking to keep the liquidation proceedings in abeyance was justified.
Issue (i): Whether the order directing liquidation of the corporate debtor called for interference, particularly in view of the attempted settlement and the plea to keep liquidation in abeyance under section 12A of the Insolvency and Bankruptcy Code, 2016.
Analysis: The Committee of Creditors had unanimously resolved to liquidate the corporate debtor, and the resolution professional moved the liquidation application under section 33(2) of the Insolvency and Bankruptcy Code, 2016. The attempt to rely on section 12A was rejected because withdrawal under that provision is not available once liquidation has commenced. The proper post-liquidation route for settlement is a scheme under section 230 of the Companies Act, 2013, as contemplated by regulation 2B of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The earlier interim restraint on auction did not alter the legal position once the governing issue was settled.
Conclusion: The liquidation order did not warrant interference and the corporate debtor was rightly directed to continue in liquidation.
Issue (ii): Whether dismissal of the application seeking to keep the liquidation proceedings in abeyance was justified.
Analysis: The application seeking to freeze the liquidation proceedings was found to disclose no sustainable ground for the relief sought. The adjudicating authority had already held that the Supreme Court order in the related matter did not bar progress in the present case, and the appellant's non-appearance did not vitiate the decision because Rule 48 of the National Company Law Tribunal Rules, 2016 permits the Tribunal either to dismiss for default or to decide on merits. The appellate tribunal found no infirmity in that approach and noted that the application was also inconsistent with the legal position that section 12A is inapplicable during liquidation.
Conclusion: The dismissal of the abeyance application was and no interference was called for.
Final Conclusion: The appeal fails, the liquidation process is permitted to continue, and all connected applications stand dismissed.
Ratio Decidendi: Withdrawal under section 12A of the Insolvency and Bankruptcy Code, 2016 is not permissible after commencement of liquidation, and any settlement at that stage must proceed only through the statutory route under section 230 of the Companies Act, 2013 read with regulation 2B of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
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